MSC Industrial Direct Co Inc (MSM) 0 Q0 法說會逐字稿

Good morning, and welcome to the MSC Industrial supply fiscal 2024 preliminary third-quarter results and annual outlook update conference call.

早安，歡迎參加 MSC 工業供應 2024 財年第三季初步業績和年度展望更新電話會議。

(Operator Instructions) Please note, this event is being recorded.

（操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Ryan Mills, Head of Investor Relations.

我現在想將會議交給投資者關係主管 Ryan Mills。

Good morning.

早安.

Thank you for joining us for MSC's preliminary third-quarter fiscal 2024 earnings results conference call.

感謝您參加 MSC 2024 財年第三季初步獲利電話會議。

Erik Gershwind, our Chief Executive Officer; and Kristen Actis-Grande, our Chief Financial Officer, are both on the call with me today.

艾瑞克‧格甚溫德 (Erik Gershwind)，我們的執行長；我們的財務長 Kristen Actis-Grande 今天都與我通話。

During today's call, we will refer to various preliminary financial data in the presentation that accompany our comments, which can be found on our Investor Relations webpage.

在今天的電話會議中，我們將參考簡報中的各種初步財務數據以及我們的評論，這些數據可以在我們的投資者關係網頁上找到。

Please note that the estimates announced today are subject to change based on the completion of the company's quarter-end review process.

請注意，今天公佈的估計可能會根據公司季度末審核流程的完成情況而改變。

Let me reference our Safe Harbor statement, a summary of which is on slide 2 of today's presentation.

讓我引用我們的安全港聲明，其摘要位於今天簡報的幻燈片 2 中。

Our comments on this call, as well as the information found on our website, contain forward-looking statements within the meaning of the US securities laws.

我們對本次電話會議的評論以及我們網站上的資訊包含美國證券法含義內的前瞻性陳述。

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these statements.

這些前瞻性陳述涉及風險和不確定性，可能導致實際結果與這些陳述預期的結果有重大差異。

Information about these risks is noted in our earnings press release and other SEC filings.

有關這些風險的資訊已在我們的收益新聞稿和其他 SEC 文件中註明。

I'll now turn the call over to Erik.

我現在將把電話轉給埃里克。

Thank you, Ryan, and good morning, everyone.

謝謝瑞安，大家早安。

Yesterday, after market close, we released preliminary results for the fiscal third quarter, and we updated our full-year outlook.

昨天收盤後，我們發布了第三財季的初步業績，並更新了全年展望。

I'll provide color on this update, and I'll then pass it over to Kristen to cover our outlook in greater detail.

我將對此更新提供顏色，然後將其傳遞給克里斯汀以更詳細地介紹我們的前景。

We'll then open up the line for questions.

然後我們將開通提問熱線。

Before getting into the numbers, let me offer some perspective.

在討論數字之前，讓我先提供一些觀點。

Over the past several years since the start of our mission-critical chapter, our management team worked hard to improve execution across all areas of the business.

自從我們的關鍵任務篇章開始以來的過去幾年中，我們的管理團隊努力提高所有業務領域的執行力。

And those efforts translated into three consecutive years of meeting or beating our targets from fiscal 2021 through 2023.

這些努力轉化為我們從 2021 財年到 2023 財年連續三年達到或超越我們的目標。

We are disappointed with our performance thus far in fiscal 2024.

我們對 2024 財年迄今的表現感到失望。

However, we are undeterred.

然而，我們並沒有被嚇倒。

And we remain steadfast in our commitment to the long-term goals that we've set for revenue growth and operating margin expansion.

我們仍然堅定地致力於實現我們為收入成長和營業利潤率擴張設定的長期目標。

Given this fiscal year, many parts of our business are performing as expected, particularly in a challenging macro environment.

鑑於本財年，我們業務的許多部分都按預期運行，特別是在充滿挑戰的宏觀環境下。

The technical and high-touch portions of our growth formula, including in-plant, vending, national accounts, public sector, and OEM, are all executing well.

我們成長模式的技術和高接觸部分，包括廠內、自動販賣機、國民帳戶、公共部門和 OEM，都執行良好。

We've isolated our performance challenges this fiscal year to two things.

我們將本財年的績效挑戰分為兩件事。

One is a slower-than-anticipated ramp of revenue growth in our core customer.

一是我們核心客戶的營收成長速度慢於預期。

And this is due, in large part, to delays in the rollout of our new website and search functions, which have a ripple effect on other initiatives like our marketing plan and our web price realignment.

這在很大程度上是由於我們新網站和搜尋功能的推出延遲，這對我們的行銷計劃和網路價格調整等其他舉措產生了連鎖反應。

We are taking action to accelerate progress on the website rollout and hence, unlock the path to core customer growth.

我們正在採取行動加快網站推出的進度，從而開闢核心客戶成長之路。

Two is a miss to our gross margin plan for the full rollout of our web price realignment.

二是我們未能全面推出網路價格調整的毛利率計畫。

This was a highly complex project hinging on highly complex pricing and discounting systems.

這是一個高度複雜的項目，依賴高度複雜的定價和折扣系統。

Our testing during the pilot phase did not sufficiently surface all of the pricing anomalies that we saw during the rollout.

我們在試點階段的測試並未充分揭示我們在推出期間看到的所有定價異常情況。

As a result, we experienced some surprises.

結果，我們經歷了一些驚喜。

We've gotten our arms around those.

我們已經抓住了這些。

We are implementing corrective actions, and we are beginning to see improvements to our gross margin trend.

我們正在實施糾正措施，我們開始看到毛利率趨勢有所改善。

Looking longer term, we'll continue executing the initiatives that are delivering.

從長遠來看，我們將繼續執行正在交付的措施。

We are correcting the two areas that hurt us this fiscal year.

我們正在糾正本財年對我們造成傷害的兩個領域。

And we will continue executing a productivity pipeline and fund ongoing investments in growth.

我們將繼續執行生產力管道並為持續的成長投資提供資金。

All of this is with an eye towards outgrowing the industrial production index by at least 400 basis points and growing adjusted operating margins to the mid-teens.

所有這一切都是為了使工業生產指數成長至少 400 個基點，並將調整後的營業利潤率提高到十幾歲左右。

I'll now turn to the specifics, beginning with a summary of our preliminary results for the third quarter.

現在我將討論具體細節，首先總結我們第三季的初步結果。

Average daily sales declined a little over 7% year over year, and that's inclusive of a headwind of approximately 300 basis points of one-time public sector orders in the prior year.

日均銷售額年減略高於 7%，其中包括前一年一次性公部門訂單約 300 個基點的逆風。

Gross margin improved slightly year over year (technical difficulty) below our expectations and is expected to be below second-quarter levels by approximately 60 basis points.

毛利率年比（技術難度）略有改善，低於我們的預期，預計將低於第二季水準約 60 個基點。

Operating expenses performed in line with expectations and were similar to the second quarter on a dollar basis.

營運支出符合預期，以美元計算與第二季相似。

These factors combined produced, in GAAP earnings per share, an expected range of $1.26 to $1.28 or a $1.32 to $1.34 on an adjusted basis.

這些因素綜合起來，得出 GAAP 每股盈餘的預期範圍為 1.26 美元至 1.28 美元，或調整後的預期範圍為 1.32 美元至 1.34 美元。

Cash flow generation remained strong in the third quarter, keeping us on track to achieve greater than 125% operating cash flow conversion for the full fiscal year.

第三季現金流產生依然強勁，使我們預計在整個財年實現超過 125% 的營運現金流轉換。

Simply put, we are not pleased with these results.

簡而言之，我們對這些結果並不滿意。

And this is especially the case for average daily sales growth and gross margin.

日均銷售額成長和毛利率尤其如此。

The remainder of my prepared remarks will focus on explaining the performance and on what we are doing to change the trajectory of those two metrics.

我準備好的發言的其餘部分將重點解釋績效以及我們正在採取哪些措施來改變這兩個指標的軌跡。

Starting with revenues, as you can see on slide 4, average daily sales increased sequentially across our primary customer types, with notable sequential improvement in the public sector.

從收入開始，正如您在投影片 4 中看到的那樣，我們主要客戶類型的平均每日銷售額連續成長，公共部門的連續成長顯著。

However, these improvements were not meaningful enough to achieve our flat year-over-year growth expectation for the full fiscal year.

然而，這些改善的意義不足以實現我們對整個財年同比成長持平的預期。

And there's two factors behind this.

這背後有兩個因素。

First, the expected macro improvements has yet to materialize.

首先，預期的宏觀改善尚未實現。

Conditions remain soft, particularly in the heavy manufacturing- and metalworking-related end markets that comprise a large percentage of our revenues.

情況仍然疲軟，特別是在占我們收入很大一部分的重型製造和金屬加工相關終端市場。

This is evidenced in output metrics, sentiment surveys, and feedback from channel partners, many of which have eroded since our last earnings call.

這在產出指標、情緒調查和通路合作夥伴的回饋中得到了證明，其中許多指標自我們上次財報電話會議以來已經受到侵蝕。

Within our own business, only 43 of our top 100 national accounts showed year-over-year growth in Q3.

在我們自己的業務中，我們前 100 名國民帳戶中只有 43 個在第三季度出現同比增長。

And second, while several of our growth initiatives are executing to plan, the improvements to the core customer growth rate are occurring at a slower pace than we expected.

其次，雖然我們的一些成長計畫正在按計畫執行，但核心客戶成長率的改善速度比我們預期的要慢。

I'll now address what we're doing about it.

我現在將談談我們正在採取的措施。

First, we're maintaining focus on the areas of the business that are delivering.

首先，我們持續專注於正在交付的業務領域。

This includes our high-touch solutions where momentum continues building, as evidenced by the quarter-over-quarter improvement of 4% in our in-plant program count and 2% in our installed vending base.

這包括我們的高接觸解決方案，其勢頭持續增強，我們的廠內項目數量環比提高了 4%，安裝的自動售貨基地環比提高了 2%，就證明了這一點。

Another area is the public sector, where budget constraints are beginning to ease.

另一個領域是公共部門，預算限制開始放鬆。

We are winning here and achieved double-digit sequential ADS improvement during the quarter.

我們在這裡獲勝，並在本季度實現了兩位數的ADS連續改善。

An additional focus area is our OEM fastener business and our cross-selling formula, which is resulting in new wins and double-digit sequential ADS improvement.

另一個重點領域是我們的 OEM 緊固件業務和交叉銷售模式，這導致了新的勝利和兩位數的連續 ADS 改善。

We remain committed to the initiatives tied to re-energizing our core customer.

我們仍然致力於為我們的核心客戶注入活力的舉措。

The single biggest headline here is our website enhancements, which are running behind schedule.

這裡最大的標題是我們的網站增強功能，但進度落後於計劃。

We still expect some improvements to roll out this fiscal year, but not to the magnitude we expected during our previous call.

我們仍預期本財年會出現一些改進，但幅度不會達到我們上次電話會議所預期的程度。

We expect the balance to now roll out in the early stages of fiscal 2025.

我們預計平衡將在 2025 財年初期推出。

And this is also slowing the pace of our marketing campaign and hence, the traction of our web price realignment initiative as we're holding off from aggressively driving new customers to our website until the improvements are in place.

這也減慢了我們行銷活動的步伐，從而減慢了我們網路價格調整計劃的吸引力，因為我們推遲了積極推動新客戶訪問我們的網站，直到改進到位。

As a result, this delay is impacting the timing of revenue inflection across our core customer base.

因此，這種延遲影響了我們核心客戶群的收入轉折點時間。

As you may have seen, our former Chief Digital and Information Officer, John Hill, resigned as of this week.

正如您可能已經看到的，我們的前首席數位和資訊長約翰·希爾已於本週辭職。

Brian Bello, who has been a strong leader within MSC's IT organization for over 15 years, is assuming the interim lead of the area.

Brian Bello 在 MSC IT 組織內擔任了超過 15 年的強大的領導者，目前擔任該領域的臨時領導。

Alan Yang, also an experienced leader with us for over 15 years, maintains his role as Chief Technology Officer.

Alan Yang 也是一位在我們工作超過 15 年、經驗豐富的領導者，目前仍擔任技術長。

To further assist our e-commerce efforts, we've added resources and some third-party expertise.

為了進一步協助我們的電子商務工作，我們增加了資源和一些第三方專業知識。

I have confidence that we will deliver a high-quality upgrade to the web experience.

我有信心我們將為網路體驗提供高品質的升級。

The web pricing realignment was completed at the end of last quarter.

網路定價調整已於上季末完成。

While it is taking more time than anticipated to translate it to growth, we continue to see encouraging signs in customer behavior that bode well for the future.

雖然將其轉化為成長需要比預期更多的時間，但我們繼續看到客戶行為中令人鼓舞的跡象，這對未來來說是個好兆頭。

These include improvements in customer net promoter scores and website metrics, such as exit, add to cart, and conversion rates.

其中包括客戶淨推薦分數和網站指標的改進，例如退出、添加到購物車和轉換率。

Finally, with respect to marketing, as I mentioned, we've taken a more moderate approach to date than we anticipated due to the website delays.

最後，關於行銷，正如我所提到的，由於網站延遲，我們迄今為止採取了比我們預期更溫和的方法。

We are gearing up for more aggressive campaign to launch coincident with material improvements to our website to strengthen our position in capturing the expected benefits.

我們正在準備發起更積極的活動，同時對我們的網站進行重大改進，以加強我們在獲取預期收益方面的地位。

We'll include digital marketing and social media campaigns, search engine marketing, supplemental print materials, and personal outreach.

我們將包括數位行銷和社交媒體活動、搜尋引擎行銷、補充印刷品和個人推廣。

The second factor that influenced our fiscal third-quarter performance is gross margin.

影響我們第三季業績的第二個因素是毛利率。

Roughly half of the miss is attributable to mix driven primarily by the public sector, combined with the slower ramp in core customers.

大約一半的失誤歸因於主要由公共部門推動的混合，加上核心客戶成長放緩。

The remainder of the gap is the result of unexpected drag from our web pricing realignment.

其餘的差距是我們的網路定價調整意外拖累的結果。

As you will recall, our pilot generated an outcome that was roughly gross margin-neutral.

您可能還記得，我們​​的試點計畫產生的結果大致與毛利率無關。

After full rollout in late February, the following few weeks in March performed in line with plan, which contemplated some early gross margin [in shop] that we saw during the pilot.

2 月底全面推出後，3 月接下來的幾週表現符合計劃，計劃考慮了我們在試點期間看到的一些早期毛利率。

However, April and early May gross margins took a step down from March rather than ticking back up as we saw in the pilot.

然而，四月和五月初的毛利率較三月下降，而不是像我們在試點中看到的那樣回升。

Our root cause analysis identified that when we move from pilot to full rollout, the complexity of our pricing and discounting systems produced some anomalous results, including unintended extra discounting.

我們的根本原因分析發現，當我們從試點轉向全面推廣時，定價和折扣系統的複雜性產生了一些異常結果，包括意外的額外折扣。

The pilot, which was smaller in volume and contain fewer product lines, was not robust enough to surface these complexities.

該試點計畫體積較小，包含的產品線也較少，不夠強大，無法解決這些複雜性。

We've taken corrective actions to address this, and we started seeing improvements in gross margin trending as of the last week of May and into early June.

我們已採取糾正措施來解決這個問題，從 5 月最後一周到 6 月初，我們開始看到毛利率趨勢有所改善。

We'll update you on our gross margin trajectory during our third-quarter call on July 2.

我們將在 7 月 2 日的第三季電話會議上向您通報毛利率軌蹟的最新情況。

And I'll now turn things over to Kristen.

現在我將把事情交給克莉絲汀。

Thank you, Erik, and good morning, everyone.

謝謝你，艾瑞克，大家早安。

Moving to slide 5, as a result of our third-quarter performance, we are lowering our outlook for the full year.

轉到投影片 5，由於我們第三季的業績，我們降低了全年預期。

We now expect ADS for the full year to be down 4.7% to 4.3% year over year.

我們現在預計全年ADS將年減4.7%至4.3%。

As you may recall, embedded in our prior outlook was a meaningful second-half step-up in our average daily sales rate that I will speak to momentarily.

您可能還記得，我們​​先前的展望中包含了下半年我們日均銷售額的有意義的提升，我將立即談到這一點。

Given our reduced sales outlook and recent gross margin performance, we are lowering expectations for adjusted operating margin for the full year to a range of 10.5% to 10.7%.

鑑於我們下調的銷售前景和最近的毛利率表現，我們將全年調整後營業利潤率的預期下調至 10.5% 至 10.7%。

For gross margin, as Erik previously mentioned, we experienced unanticipated headwinds this quarter from our web pricing realignment initiatives combined with mixed headwinds.

對於毛利率，正如艾瑞克之前提到的，本季我們經歷了來自網路定價調整舉措和混合阻力的意外阻力。

Additionally, we tightened the expected outcome of certain other financial metrics, with less than three months left in the fiscal year.

此外，我們收緊了某些其他財務指標的預期結果，本財年還剩下不到三個月的時間。

As shown on this slide, all of these fall within the prior range.

如這張投影片所示，所有這些都落在先前的範圍內。

And lastly, it's worth noting that we do continue to expect strong cash flow generation throughout the year and have approximately 2.1 million shares remaining on our current share repurchase authorization.

最後，值得注意的是，我們仍然預計全年會產生強勁的現金流，而我們目前的股票回購授權中剩餘約 210 萬股。

Before turning the call back over to Erik, I want to spend a moment in walking you through drivers influencing our lowered revenue improvement in the second half.

在將電話轉回給埃里克之前，我想花點時間向您介紹一下影響我們下半年收入改善下降的因素。

The midpoint of our updated outlook implies a first-half to second-half ADS step-up of 1% compared to the 10% we previously expected.

我們更新的展望的中點意味著上半年到下半年ADS 增幅為1%，而我們先前預期為10%。

The biggest factor of the decline is lower-than-expected benefits from macro conditions, which is also pressuring the typical seasonal uplift we experienced in the second half.

下降的最大因素是宏觀環境的效益低於預期，這也給我們下半年經歷的典型季節性上漲帶來了壓力。

The balance of the walk can be found on slide 6.

步行的平衡可以在幻燈片 6 中找到。

I will now turn the call back over to Erik.

我現在將把電話轉回給埃里克。

Thanks, Kristen.

謝謝，克里斯汀。

Over the past three years, our management team worked hard to improve execution across all areas of the company.

過去三年來，我們的管理團隊努力提升公司各領域的執行力。

We built a solid track record of meeting our commitments for many quarters consecutively.

我們在連續多個季度履行承諾方面建立了良好的記錄。

This year has been a step-back, and we are not pleased with our performance.

今年是倒退的一年，我們對自己的表現並不滿意。

However, we are moving swiftly to take corrective actions and to restore performance to where it belongs.

然而，我們正在迅速採取糾正措施，並將績效恢復到應有的水準。

We remain firmly committed to our longer-term goals of outgrowing IP by 400 basis points or more and achieving mid-teens operating margins.

我們仍然堅定地致力於實現 IP 成長 400 個基點或更多並實現中雙位數營運利潤率的長期目標。

Before we open the call for questions, and as a reminder, the purpose of our press release and call is to update you on our preliminary results for the fiscal third quarter and the impact on our annual outlook.

在我們開始提問之前，作為提醒，我們發布新聞稿和電話會議的目的是向您介紹我們第三財季初步業績的最新情況以及對我們年度前景的影響。

We appreciate your keeping questions this morning focused on those two topics.

我們感謝您今天早上將問題集中在這兩個主題上。

And then we'll provide more color and a progress update on our July 2 earnings call and then in turn, a full fiscal 2025 framework during our October call.

然後，我們將在 7 月 2 日的財報電話會議上提供更多資訊和進度更新，然後在 10 月的電話會議上提供完整的 2025 財年框架。

Thank you, and we'll now open up the line.

謝謝您，我們現在將開通該線路。

(Operator Instructions) Dave Manthey, Baird.

（操作員說明）Dave Manthey，Baird。

Hey.

嘿。

Good morning, guys.

早上好傢伙。

This is Quinn Fredrickson, on for Dave.

我是奎因‧弗雷德里克森 (Quinn Fredrickson)，代表戴夫 (Dave)。

(multiple speakers)

（多個發言者）

Hey, good morning, Kristen.

嘿，早上好，克里斯汀。

So I just wanted to ask about gross margin.

所以我只是想問毛利率。

So specifically, the 60 basis points of negative variance versus your expectation in 3Q, how much of the two factors, the mix and web price solution, are you seeming carried over into 4Q, if at all?

具體來說，與您在第三季度的預期相比，負方差為60 個基點，混合和網路價格解決方案這兩個因素中的多少，您似乎會轉移到第四季度（如果有的話） ？

And then I think you made a mention about about exceeding normal seasonality or in line with normal seasonality for 4Q.

然後我認為您提到了第四季度超出正常季節性或符合正常季節性的情況。

Can you just remind us of what fair normal sequentials are for 4Q?

您能否提醒我們第四季的公平正常順序是什麼？

Yeah, sure, Quinn.

是的，當然，奎因。

So on the first part of your question on the web price realignment, we would expect that 30-basis-point headwind that we saw sequentially Q2 to Q3 to correct itself.

因此，關於您關於網路價格調整的問題的第一部分，我們預計第二季到第三季連續看到的 30 個基點的逆風會自行修正。

So you should think about a 30-basis-point benefit Q3 to Q4.

因此，您應該考慮第三季至第四季的 30 個基點收益。

I'll elaborate a little bit maybe on how to think about overall gross margin sequentially 3Q to 4Q.

我將詳細闡述如何依序考慮第三季到第四季的整體毛利率。

Because obviously, that is just one component of that.

因為顯然，這只是其中的一個組成部分。

So if you assume you get a 30-basis-point improvement in price from the web price realignment corrections, there is a step-up sequentially in product cost inflation, which is about 40 basis points.

因此，如果您假設透過網路價格調整修正獲得了 30 個基點的價格改善，那麼產品成本通膨將連續上升，約為 40 個基點。

So that is -- no doubt, it's a decline of 10 basis points sequentially.

所以毫無疑問，連續下降了 10 個基點。

And then we're seeing a little bit more mix pressure coming in the fourth quarter.

然後我們看到第四季會出現更多的混合壓力。

I'd size that as probably 10 to 20 basis points down.

我認為可能會下調 10 到 20 個基點。

And then to answer your second question, what we would normally see, Q3 to Q4 sequentials, is a headwind of 40 to 50 basis points from mix.

然後回答你的第二個問題，我們通常會看到，第三季到第四季的序列，是混合的 40 到 50 個基點的逆風。

So that's kind of in a normal year.

所以這在正常的一年裡是這樣的。

Based on what we see in product and customer mix, Q3 to Q4, that would be the, quote, normal amount of pressure on mix.

根據我們在第三季到第四季的產品和客戶組合中看到的情況，這將是組合上的正常壓力。

Okay.

好的。

Thank you.

謝謝。

Ken Newman, KeyBanc Capital Markets.

肯紐曼，KeyBanc 資本市場。

Hey, good morning, guys.

嘿，早上好，夥計們。

Good morning, Ken.

早安，肯。

Good morning, Ken.

早安，肯。

First on the demand outlook.

首先是需求前景。

I'm just curious, obviously, you're seeing a little bit more headwinds within your heavy manufacturing and your core customer sector.

我只是很好奇，顯然，您在重型製造業和核心客戶領域看到了更多的阻力。

Just any color on the impact of what auto sales this quarter were, and just how you're thinking about demand in that vertical into the fourth quarter.

任何關於本季度汽車銷量影響的顏色，以及您如何看待第四季度該垂直領域的需求。

And I think it'll also be -- just be helpful if you just talk through with any more granularity that you can on the other heavy manufacturing end markets that are faster to turn than others.

我認為，如果您能在其他比其他市場更快轉變的重型製造終端市場上進行更細緻的討論，那麼這也會很有幫助。

Yeah, sure.

好，當然。

I'll take it, Ken.

我會接受的，肯。

Look, I would say in general, and I don't have the auto numbers right in front of me.

聽著，我一般來說，而且我面前沒有汽車號碼。

But in general, what we saw was -- obviously, as you know, 70% of our business is manufacturing.

但總的來說，我們看到的是——顯然，如你所知，我們 70% 的業務是製造業。

The majority of that is heavy manufacturing areas, like machinery and equipment, metal fabrication, our job shops, which are highly representative of our core customers, were particularly soft.

其中大部分是重型製造領域，如機械和設備、金屬製造、我們的加工車間，這些領域高度代表我們的核心客戶，特別疲軟。

You could see that if you look at the IP and some of the sub-indices, that's where we saw most of the softness.

如果你看一下 IP 和一些分項指數，你會發現，這就是我們看到大部分疲軟的地方。

And that's -- really, reason number one for the core customer not inflecting as we expected was we were expecting more improvement there.

事實上，核心客戶沒有像我們預期的那樣變化的第一個原因是我們期望那裡有更多的改進。

And then again, reason number two was, in our own control with some of the initiatives and particularly around the website that we have our arms around now and plan to fix quickly.

再說一遍，第二個原因是，我們自己可以控制一些舉措，特別是我們現在已經掌握併計劃快速修復的網站周圍的舉措。

Okay.

好的。

Maybe just as like follow-up, on the 4Q OpEx, I think you're highlighting that being sequentially higher as a percentage of revenue.

也許就像後續行動一樣，關於第四季度的營運支出，我認為您強調的是佔收入的百分比連續上升。

Can you quantify in dollars what is the sequential impact of maybe some higher incentive comp or versus the other pockets of lower volume absorption?

你能用美元來量化一些更高的激勵補償或相對於其他較低容量吸收的領域的連續影響嗎？

And any color there?

那裡有什麼顏色嗎？

Yeah, sure, Ken. (technical difficulty) the step-up, I'd break it down into really two main buckets.

是的，當然，肯。 （技術難度）升級，我會將其分為兩個主要部分。

One is an increase in variable compensation, which is tied to non-repeating benefits that we got in the third quarter.

一是可變薪資的增加，這與我們在第三季度獲得的非重複性福利有關。

And I'd size that like around $4 million roughly.

我估計這個金額大約是 400 萬美元左右。

And then the second bucket is a combination of D&A from prior strategic investments and then strategic investments, which are currently impacting the P&L.

第二個桶子是先前策略性投資的 D&A 以及目前正在影響損益的策略性投資的組合。

And I'd size that around like $2 million to $4 million; could be as high as $5 million, depending on when we bring the marketing efforts online.

我的預算大概是 200 萬到 400 萬美元；可能高達 500 萬美元，具體取決於我們何時將行銷工作放到網路上。

Got it.

知道了。

It's helpful.

這很有幫助。

Thanks.

謝謝。

Steve Volkmann, Jefferies.

史蒂夫·福克曼，杰弗里斯。

Hi.

你好。

Good morning, guys.

早上好傢伙。

Thanks for taking my question.

感謝您提出我的問題。

I wanted to talk a little bit about the price realignment, Erik, because, obviously, the others have done this in the past.

艾瑞克，我想談談價格調整，因為顯然其他人過去也這樣做過。

It's been choppy for most to those have done it.

對於大多數已經做到的人來說，這都是不穩定的。

And I guess, I'm trying to figure out how you have confidence that you sort of have your hands around the unexpected dilution that you saw this quarter relative to that initiatives.

我想，我正試圖弄清楚您如何有信心處理本季與這些舉措相關的意外稀釋。

Yeah.

是的。

Ken -- Steve, thanks for the question.

肯——史蒂夫，謝謝你的提問。

As you said, look, highly complex initiative, we entered the full rollout with a lot of competence.

正如您所說，看，這是一個高度複雜的計劃，我們以強大的能力進入了全面部署。

Obviously, our goal was gross margin neutrality, which was an aggressive goal.

顯然，我們的目標是毛利率中性，這是一個激進的目標。

And we had a lot of confidence in that goal, and the confidence was supported by the pilot results.

我們對這個目標充滿信心，而這種信心得到了試點結果的支持。

So we were feeling very good going into full rollout.

因此，我們對全面推出感覺非常好。

As we mentioned, essentially, what happened here, Steve, is the pilot simply wasn't robust enough to surface -- we have a very complex set of discount structures and systems and algorithms.

正如我們所提到的，史蒂夫，這裡發生的事情本質上是試點不夠強大，無法浮出水面——我們有一套非常複雜的折扣結構、系統和演算法。

And all of the anomalies didn't get surfaced during the pilot.

所有的異常現象並沒有在試運轉期間顯現出來。

That's the punch line.

這就是妙語。

I will tell you that we have -- I've been pleased with the reaction of the team.

我會告訴你，我們對團隊的反應感到滿意。

Because these anomalies were in pockets and not across the board, it took us a bit of time to get at them.

因為這些異常現像都存在於口袋中，而不是全面存在，所以我們花了一些時間才發現它們。

We do feel that we have gotten to them.

我們確實覺得我們已經接近他們了。

And the parameter there, Steve, of how do we know is just seeing several weeks in a row with nothing new.

史蒂夫，我們如何知道的參數是連續幾週沒有任何新的東西。

Once we did, fixes went in.

一旦我們這樣做了，修復就開始了。

And we are starting to see the fixes' impact in a positive way, impact gross margin trending.

我們開始看到修復措施的正面影響，影響毛利率趨勢。

And that would be really late May into the current month.

那確實是從五月下旬到本月。

But the confidence would come from the response from the team when we identified the issues, one; and two, having several weeks now under our belt of not surfacing anything new.

但信心來自於我們發現問題時團隊的反應，一；第二，我們已經有幾個星期沒有發布任何新內容了。

Okay.

好的。

That's helpful.

這很有幫助。

And I guess, the follow-up maybe for Kristen is, how should we think sort of sequentially about gross margin than -- is it better in the fourth quarter?

我想，克里斯汀的後續行動可能是，我們該如何按順序思考毛利率——第四季是否更好？

Or how does it sort of stack up with normal seasonality?

或者說它跟正常的季節性有什麼關係？

Yeah.

是的。

So overall, slightly better than normal seasonality, Steve.

總的來說，史蒂夫，比正常的季節性要好一些。

And the way that you get there sequentially from Q3 to Q4 -- this is what we're expecting to happen in fiscal '24 -- you get a slight improvement from price at around 30 basis points.

從第三季到第四季依序實現這一目標的方式——這就是我們預計在 24 財年發生的情況——價格會略有改善，幅度約為 30 個基點。

Cost, however, is stepping up sequentially.

然而，成本正在逐步增加。

So net price cost should be back down about 10 basis points, and then a little bit more mix headwind down about 10 to 20 bps.

因此，淨價格成本應回落約 10 個基點，然後再進一步混合逆風下跌約 10 至 20 個基點。

Okay.

好的。

All right.

好的。

Thank you.

謝謝。

Patrick Baumann, JPMorgan.

派崔克鮑曼，摩根大通。

Hi, good morning.

早安.

Thanks for -- let me in here.

謝謝你——讓我進來。

Just wanted to zero in on the website enhancements and your ability to manage this within the renewed timeline, given the leadership changes you disclosed this week.

鑑於您本週披露的領導層變動，我只是想將網站的增強功能以及您在更新的時間表內管理此內容的能力歸零。

So first, what changes have been made already to the website, and what's still to come?

首先，網站已經進行了哪些更改，還有哪些更改？

And then relatedly, you said something about adding resources to help support this.

然後，與此相關的是，您提到了有關添加資源來幫助支持這一點的內容。

Does this require hiring new people from the outside?

這是否需要從外部聘用新人？

And if so, how long does it take to get new software engineers into the company to assist you?

如果是這樣，需要多長時間才能讓新的軟體工程師進入公司來幫助你？

Pat, yeah, sure.

帕特，是的，當然。

Happy to take this one.

很高興接受這個。

So look, I think just stepping back for a second, we talked about the core customer not inflecting impart economy.

所以，我想先退一步，我們討論了核心客戶不會影響經濟。

This is the big one that's in our control because the website -- and I'll talk to your specifics and give you some more color here.

這是我們控制的一個大問題，因為網站——我會談談你的具體情況，並在這裡給你更多的色彩。

But the website, we had several programs all lined up towards the core customer.

但是在網站上，我們有幾個專案都是針對核心客戶的。

Not having the website ready for prime time really had a ripple effect on the other ones because we didn't want to launch the marketing.

網站沒有為黃金時間做好準備確實對其他網站產生了連鎖反應，因為我們不想啟動行銷。

And without launching the marketing, the web pricing realignment, it's hard to get as much traction as we want with some of our -- with new customers for certain.

如果不啟動行銷、網路定價調整，就很難獲得我們想要的一些客戶的吸引力——當然也包括新客戶。

So this was the -- this is the issue on the revenue side.

這就是收入方面的問題。

What I would tell you in terms of what -- at the start of the year, I think we had highlighted two areas of focus.

我想告訴你的是——在今年年初，我認為我們強調了兩個重點領域。

One is what we call platform, which is the transactional engine; the second, being searcher product discovery of how you find and buy.

一是我們所說的平台，也就是交易引擎；第二，搜尋者發現您如何尋找和購買產品。

And where we're at now is most of the work on the platform is done.

我們現在所處的位置是平台上的大部分工作已經完成。

The big headline here, Pat, is the search function, which is the biggest -- unfortunately, that is the big step function change in terms of the quality of the user experience.

帕特，這裡的大標題是搜尋功能，這是最大的——不幸的是，就用戶體驗品質而言，這是功能的重大變化。

And what we're counting on for revenue growth is the research and product discovery function, and it's running late.

我們指望收入成長的是研究和產品發現功能，但它已經遲到了。

I would tell you that John's resignation, really, does not have an impact on our timeline here.

我想告訴你，約翰的辭職確實不會對我們的時間表產生影響。

One, I guess, silver lining is it gives me a chance -- this is an area that's near and dear to my heart.

我想，一線希望是它給了我一個機會──這是我非常親近的領域。

I go back a long way with the early days of our website to get even closer to it and to the team.

我回顧了我們網站的早期階段，以更加接近它和團隊。

So I have no doubt we can and we will fix this.

所以我毫不懷疑我們可以而且會解決這個問題。

What I would tell you is that the resources that we're talking about -- we're not talking about new hires that are months away.

我要告訴你的是，我們正在談論的資源——我們不是在談論幾個月後的新員工。

Because you're absolutely right, Pat; I mean, we are approaching this with urgency.

因為你是絕對正確的，帕特；我的意思是，我們正在緊急處理這個問題。

So when I say assistance in resources, it's either coming from within the company or coming from the third-party assistance that I mentioned.

所以當我說資源援助時，它要么來自公司內部，要么來自我提到的第三方援助。

Because it's got to happen fast.

因為它必須很快發生。

So what I would anticipate is some benefits to the search product discovery experience beginning to roll out this fiscal quarter.

因此，我預計本財季開始推出的搜尋產品發現體驗會帶來一些好處。

And then others, and probably the bulk of it, to be honest, will be early -- in the early portions of the fiscal '25.

然後其他的，說實話，可能是其中的大部分，都會提前——在 25 財年的早期部分。

And our plan is to -- the marketing program will launch commensurate with when we feel that our customers feel that the experience is ready for prime time, and we're ready to drive people there.

我們的計劃是——當我們覺得我們的客戶覺得這種體驗已經準備好迎接黃金時段時，行銷計劃就會啟動，而我們也準備好把人們帶到那裡。

So I am confident we will -- can and will fix it, and we're moving with urgency.

因此，我相信我們能夠並且將會解決這個問題，而且我們正在緊急行動。

So we're not waiting on months for new engineers.

因此，我們不需要等待新工程師數月。

Okay.

好的。

Thanks for your response.

感謝您的答覆。

I'll respect your request for one question, and best luck.

我會尊重你提出的一個問題的要求，祝你好運。

Thank you, Pat.

謝謝你，帕特。

Thanks, Pat.

謝謝，帕特。

This concludes our question-and-answer session.

我們的問答環節到此結束。

I would now like to turn the conference back over to Ryan Mills for any closing remarks.

現在我想將會議轉回給瑞安·米爾斯（Ryan Mills）發表閉幕詞。

Thank you for joining today's call.

感謝您參加今天的電話會議。

Please reach out with any follow-up questions you may have.

如果您有任何後續問題，請與我們聯絡。

We look forward to speaking to you again during our fiscal third-quarter earnings call on July 2.

我們期待在 7 月 2 日的第三財季財報電話會議上再次與您交談。

Conference has now concluded.

會議現已結束。

Thank you for attending today's presentation.

感謝您參加今天的演講。

You may now disconnect.

您現在可以斷開連線。